BAA set for legal fight if ordered to sell airports

Heathrow owner could seek judicial review if Competition Commission makes it sell Stansted and either Glasgow or Edinburgh BAA could seek a judicial review against the Competition Commission if, as expected, the airport group is ordered on Tuesday to sell Stansted and one of its Scottish airports. The owner of Heathrow is braced for a ruling that it must offload Stansted, Britain’s third largest airport, and either Edinburgh or Glasgow airport. The commission indicated earlier this year in a preliminary review of a 2009 ruling that it was still minded to order the forced divestments in order to increase competition in the airport market in south-east England and Scotland. Tuesday’s final report is expected to give BAA 18 months to arrange an auction that will leave it with a rump of airports at Heathrow, Aberdeen, Southampton and either Glasgow or Edinburgh. However, BAA is adamant that the market for UK airports has changed significantly since the commission gave its initial verdict. One strand of the commission’s argument is that breaking up BAA’s monopoly – it used to own the top three airports in Britain before it sold Gatwick in a £1.5bn deal – will encourage building of new runways. BAA argues that the arrival of a new government in May 2010 has nullified that position, because the Conservative/Lib Dem coalition has ruled out the construction of new landing strips in south-east England, including at Stansted and Gatwick. Nonetheless, the commission has countered that disposals will increase competition by introducing new owners who will improve the customer experience. Gatwick’s new owner, US fund Global Infrastructure Partners, is opening a new security area in its south terminal this year and is luring airlines from Stansted. Although Gatwick’s poaching act confirms a degree of competition with Stansted, BAA believes that Heathrow operates in a completely different market as the UK’s only hub airport and is not constricting growth at Stansted. BAA believes easyJet’s recent move to operate flights from Southend airport underlines the competitive pressures that Stansted faces, with or without new owners. BAA Travel & leisure Airline industry Dan Milmo guardian.co.uk

Posted by on July 18, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.